The State Organization for Marketing of Oil (SOMO), which oversees crude oil exports on behalf of Iraq’s federal government, stated that international companies active in the Kurdistan region remain contractually obliged to deliver their oil production to it. This clarification follows Norway-based DNO ASA’s reiteration of its intention not to participate in the agreement signed in September between federal and Kurdish authorities.
DNO continues direct sales to Kurdistan
DNO, the largest foreign oil producer operating in Kurdistan, had initially welcomed the tripartite agreement reached between Iraq’s Ministry of Oil, the Kurdistan Ministry of Natural Resources, and the operating companies. However, the company did not sign the agreement, citing uncertainty over how outstanding debts would be settled. It continues to sell directly to the authorities of the semi-autonomous Kurdistan Regional Government without routing through federal export channels.
A unified framework through the Iraq-Türkiye pipeline
The September agreement stipulates that SOMO will handle the export of crude extracted from Kurdish oil fields via the pipeline linking Iraq to Türkiye. This infrastructure is the only export route to international markets for oil volumes produced in the north of the country. Resistance from certain companies to comply with this agreement undermines the Iraqi government’s strategy to centralise export flows.
Kurdish regional government reaffirms its commitment
According to the statement issued by SOMO, the Kurdistan Ministry of Natural Resources has confirmed its adherence to the agreement. The statement recalls that “all international companies operating in the region’s fields are required to deliver the quantities of crude oil they produce to SOMO, except for those intended for local consumption.” This clarification aims to reinforce the central government’s authority over the marketing of natural resources.
A matter of control over oil revenues
The ongoing divergence between some companies and Iraq’s federal authorities highlights the tensions over managing oil revenues. Baghdad has been seeking for several years to consolidate control over exports amid recurring budgetary disputes with the Kurdish region. DNO’s position, if followed by others, could further disrupt deliveries through the strategic pipeline to Türkiye.
